“The price increases being implemented are small compared to the increases in materials and labor costs. If we raise prices by the same proportion, buyers can't afford it, sales will plummet, and we can't afford to see sales drop,” stated engineer Rafael Durán.
SANTO DOMINGO – In response to the numerous complaints filed in recent weeks regarding rising housing prices, the National Institute for the Protection of Consumer Rights (Pro Consumidor) announced yesterday that it will begin issuing rulings on claims filed against construction companies starting next Monday.
Buyers' complaints stem from increases in property prices, while industry representatives consider the increases minimal compared to the price hikes in construction materials, which they say have not stopped for two years.
Eddy Alcántara, head of the consumer protection agency, released the information through a statement published on his social media.
“The Executive Directorate of Pro Consumidor informs all consumers who have purchased real estate and who have filed claims against their suppliers for increases in the originally contracted purchase price, that the resolutions relating to these cases will be issued and notified starting next Monday, the 18th of this month,” the entity states.
He explains that the measure taken by the organization that protects the rights of consumers was following frequent complaints from citizens about price variations from what was agreed in their contracts with different construction companies.
In the last month, Pro Consumidor has received approximately 125 or 130 complaints, in addition to other cases that had been filed before the last week.
The complaints
“A property that is practically paid for and they are charging increases based on its total value, that is, in my case the increase they have asked for does not correspond because our property is only missing a tiny sum to pay it off,” explains a buyer who prefers to remain anonymous.
He says he knows of other cases where buyers have paid between 30% and 40%, and the construction company isn't charging them for what they still owe, but for the full amount. In our case, the increase amounts to almost $17,000; in another case, it was $9,000.
"But what's irritating is that no matter the level of debt you have, you have to pay for what you've already paid, meaning that we're not entitled to increases based on the level of payments issued.".
He considers the increase unfair, after having paid in advance, and that although the construction firm maintains that it is 13%, when the calculations are done the increase amounts to 40%.
President AEI
“The most sensible thing to do is to wait for Pro Consumidor to issue its resolutions, and we give a vote of confidence to this institution that always seeks to resolve conflicts through consensus,” declared Alberto Bogaert, president of the Association of Real Estate Agents and Companies (AEI), when consulted last night by El Inmobiliario.
He explained that the increase in housing prices is due to the variation in the price of construction materials, "so it's ultimately a matter of cost.".
Increases are few, says engineer
“The price increases being implemented are small compared to those seen in materials and labor costs. If we raise prices by the same proportion, buyers can't afford it and sales will plummet, and we can't afford to see sales drop,” stated engineer Rafael Durán.
He explained that as a construction company they make the appropriate increases, always trying to ensure that the sale doesn't fall apart, "because if you have financing from the bank and suddenly 40 or 50% of the clients are returned, you won't have anything to pay the bank with, you'll have a property that you can sell for more, but who will you sell it to?".
He believes that this is a serious issue and that if Pro Consumidor adopts a populist stance and supports all citizens' demands, a debacle could occur in the construction sector.
Durán states that “everyone knows that things have increased and that as such the one who must pay is the owner, not the builder.”.
He wondered if builders could file complaints with the consumer protection agency against companies that had raised material prices. "So who are we builders supposed to complain to?" the businessman asked.
Increase in materials
The arrival of the pandemic brought with it an unstoppable upward climb in the prices of construction materials. The shortage caused by the halt in maritime freight was the first warning sign that triggered the price increases; this was compounded by the significant rise in maritime cargo costs.
The war between Russia and Ukraine again triggered an increase in materials such as rebar bundles, which has continued to rise since then, generating increases in its derivatives.
From wood, faucets, cement, elevators, ceramics, bathroom accessories, steel, among other materials, all have registered significant increases in the last two years.
